AIRLINK is considering seeking an injunction to prevent SA Express (SAX) from implementing an amendment to its licence that will see the airline increase its flights on three new routes.
SAX has received approval by the International Air Services Council (IASC) to add seven new return flights between Cape Town International Airport and Gaborone in Botswana, seven return flights between OR Tambo International Airport and Bulawayo in Zimbabwe, and three return flights to Luanda in Angola.
The airline called out Airlink as the reason for the delay, saying the competitor’s objections were in an “effort to remain the sole operator in these markets”.
Airlink has responded saying that of the three routes for which SAX has been approved, Airlink doesn’t offer services on two and the remaining route has two other competitors in addition to Airlink. “SAX is throwing up red herrings as a purposeful decoy in order to detract from the real issue. Our objection is not intended to preclude competition, but rather to demand fair competition,” says Rodger Foster, md of Airlink.
Airlink lodged an objection for the new routes, believing it was made as a result of an error of judgment due to SAX not submitting its audited financial statements and therefore not being able to prove its financial fitness – a prerequisite of the International Air Services Act, says Rodger.
“South Africa’s International Air Services Regulations stipulate that all applicants must submit their financial data in support of their applications for new or amended air services licences, and are also required to submit their audited annual financial statements and demonstrate that at the time of the application they are not insolvent, that they have the financial means to undertake the additional air services and that they are a going concern,” Airlink said in a statement.
Last month, SAX advised Parliament’s Select Committee on Public Enterprises that it was currently able to operate just four of the 11 aircraft on its licence and that its fleet expansion plan had been delayed due to ‘liquidity challenges’, the statement adds.
Airlink calls the Council’s decision to approve SAX’s application to operate the additional routes prejudicial to the general public and the air service industry. Airlink has asked the council to review its decision since Airlink’s objection was not upheld and SAX’s application to amend its licence was granted.
“Our requirement of the licensing council is that all applicants be treated fairly and equally. SAX should have at least presented its audited annual financial statements so the council could adjudicate its financial fitness based on fact. During the hearing process, the council insisted that SAX would have to do this, and clearly this hasn’t happened,” Rodger says.
“If privately owned airlines are required to adhere to the law and submit audited financial statements and thereby demonstrate their financial fitness, we believe that the same rules must apply to SOEs like SAX,” Rodger says.
Airlink adds that competing with state-subsidised perpetual loss-making competitors that lack a profit imperative, receive tax-payer bailout and, which, by its own admission, is unable to keep all of its aircraft airworthy, is grossly unfair.
Attempts by TNW to make contact with the Department of Transport – who appoints the IASC – for comment, were unsuccessful.